News - This is what the Ripple ruling means for the cryptocurrency community

By Luc Vesters

This is what the Ripple ruling means for the cryptocurrency community

Ripple (XRP)
Laws and regulations

The verdict has been handed down. After years of litigation, Ripple won an important victory yesterday over the Securities and Exchange Commission. A U.S. court ruled: XRP is not a "security", at least not when traded on crypto exchanges, but institutional funding rounds are. The crypto industry rejoices. In recent months, XRP had repeatedly been the target of legal attacks by the SEC.

Hagen Weiss, legal counsel at the commercial law firm Dentons, told BTC-ECHO that it was a "very good decision," especially with respect to the court's reasoning. The ruling clearly distinguished between the actual token and the associated activity. Consequently, the court classified only token sales for institutional customers as an offering of securities, but not trading on secondary markets such as Coinbase, Binance or Kraken.

Ripple: A statement with a signal effect?

The crypto space sees the ruling as a clear victory in its battle with U.S. regulators. The Ripple lawsuit was seen by many observers and experts as a blueprint for the regulatory future of the crypto industry in the US. The verdict should have an impact on the entire industry, agrees Weiss. "The U.S. may now once again become more attractive to capital market-oriented crypto companies," says the lawyer. However, it is also conceivable that other companies such as Coinbase or Binance, which are also in litigation with the SEC, will adjust their strategies to hope for similar success.

However, the question remains whether the SEC will simply accept this defeat or seek the next higher authority. Shortly after the ruling, the authority left the option open. The decision is under review, according to an official statement. Hagen Weiss considers an appeal a good possibility, "precisely because of the precedent." However, the odds are not necessarily favorable, the lawyer continued. Also because the court found a lack of official instructions and rules on the part of the SEC.

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